The specific agency problems created by the assumption that managers are wealth maximisers include which of the following?
A)the differences between managers' and shareholders' attitudes to risk
B)the potential for company managers to maximise their wealth at the expense of company shareholders
C)the tendency for management to focus on short- term performance at the expense of long- term growth
D)all of the above

Question

Quizplus · Accepted Answer

All three scenarios listed (differences in attitudes to risk, potential for managers to prioritize their own wealth over shareholders, and short-term focus at the expense of long-term growth) are examples of agency problems that can arise from assuming managers are solely motivated by wealth maximization.

The Specific Agency Problems Created by the Assumption That Managers